On January 1, 2022, Patterson Company exchanges 15,000 shares of its common stock for all outstanding shares of Shapiro, Inc. Each of Patterson's shares has a $4 par value and a $50 fair value. The fair value of the stock exchanged in the acquisition was considered equal to Shapiro's fair value. Patterson also paid $25,000 in stock registration and issuance costs in connection with the merger. Several of Shapiro's accounts' fair values differ from their book values on the acquisition date. The assets and liabilities with fair-and-book-value differences are reported as follows. Other assets and liabilities (not in this table) have their fair value equal to their book value. Book Values Fair Values Receivables 65,000 63,000 Trademarks 95,000 225,000 Record music catalog 60,000 180,000 In-process research and development - 200,000 Notes payable (50,000) (45,000) Pre-combination January 1, 2022, book values for the two companies are as follows: Patterson Shapiro Cash 60,000 29,000 Receivables 150,000 65,000 Trademarks 400,000 95,000 Record music catalog 840,000 60,000 Equipment (net) 320,000 105,000 Totals 1,770,000 354,000 Accounts payable (110,000) (34,000) Notes payable (370,000) (50,000) Common stock (400,000) (50,000) Additional paid-in-capital (30,000) (30,000) Retained earnings (860,000) (190,000) Totals (1,770,000) (354,000) Part A: Assume that this combination is a statutory merger so that Shapiro's accounts will be transferred to the records of Patterson. Shapiro will be dissolved and will no longer exist as a legal entity. Prepare the following: 1. Journal entries to record the business combination. Show supporting calculations to get credit. 2. A postcombination balance sheet for Patterson as of the acquisition date. Use the provided template (in Excel). Part B: Assume that no dissolution takes place in connection with this combination. Rather, both companies retain their separate legal identities. Patterson will operate Shapiro as a wholly owned subsidiary with a separate legal and accounting identity. Prepare the following: 1. Journal entries to record the business combination. Show supporting calculations to get credit. 2. Using the worksheet provided (in Excel), consolidate the two companies as of the combination date. Be sure to adjust Pattersons accounts for entries in (1) before preparing the consolidated balance sheet. How do the balance sheet accounts compare across parts A and B? Why? (Something to think about, no point assigned.)